In re STOOKEY

In re STOOKEY. No. 14047. District Court, W. D. New York. Aug. 19, 1932. John Leo Sullivan, of Dunkirk, N. Y., for bankrupt. Walter Record, of Forestville, N. Y., for objecting creditor. [MAJORITY — KNIGHT, District Judge.] KNIGHT, District Judge. Bankrupt has filed petition for discharge, to which objections were filed by Raymond Richardson, a creditor. The referee being disqualified to hear the argument, the question comes directly to this court for decision. The creditor having failed to appear on the argument, it must be assumed that he rests his ease on the specifications filed. The burden of proof in such a ease rests on the objector. He must establish conduct on the part of the debtor such as will bar a discharge. Farmer’s Savings Bank of Grimes, Iowa, v. Allen (C. C. A.) 41 F.(2d) 208; Bank of Monroe of Monroe, Neb., v. Gleeson (C. C. A.) 9 F.(2d) 520. The specifications filed by the creditor set out that the bankrupt on April 21, 1927, over eighteen months before his adjudication, assigned to his mother; Clara Stookey, two mortgages aggregating $3,500, receiving no consideration therefor; the mother agreeing to hold the said moneys for his use and benefit and to repay said moneys to him on demand. It is alleged that these mortgages or the moneys collected on them remain the property of the bankrupt; that he failed to list them in his schedules; and that this constitutes a continuing concealment of his assets from the 21st day of April, 1927, with intent to hinder, delay, and defraud creditors. From the testimony taken before the referee at the adjourned first meeting of creditors on December 19, 1928, it appears that the bankrupt borrowed from his mother some money which he lost in an unsuccessful business venture and that the assignments were in repayment of that loan. The examination of Clara Stookey does not bring to light any such agreement as is alleged by the objecting creditor. There being an utter lack of testimony to support the objections of the petitioning creditor, I am compelled to find that a discharge must be granted to the bankrupt.